The Center News: May 2017

The team here at the Manufacturers’ Center for Legal Action (MCLA) is pleased to announce a new engagement opportunity for in-house counsel at NAM member companies—the MCLA Legal Advisory Council.

As many of you know, soon after the MCLA was launched in 2013, we established six issue-specific Legal Issue Advisory Groups to provide a platform for member in-house counsel to engage with the legal team. These groups were organized to focus on the priority engagement areas for the legal center—Labor & Employment; Energy & Environment; Product & Civil Liability; Corporate Governance & Shareholder Activism; Intellectual Property and International. Each of these groups was supported by a law firm sponsor.

In recognition of the fact that our members staff their legal matters in a variety of ways, and many members have small teams juggling multiple issues, we are rebooting this committee structure and consolidating the six groups into one to better align with member resources and preferences.

Beginning this month, the new MCLA Legal Advisory Council will be the one-stop shop for in-house counsel from NAM companies to engage with the legal center. The group will assist the MCLA team in identifying, prioritizing and vetting cases for potential NAM involvement. Participants in this group will receive regular updates on relevant regulatory and litigation developments and have a regular opportunity to share issues of concern with the MCLA team and manufacturing in-house peers. The group will provide a forum for networking, sharing best practices and discussing compliance challenges. We will convene the group quarterly via teleconference with the agenda driven by priority issues of the moment, and will be in more frequent contact electronically. The group will continue to be supported by our excellent, expert law firm sponsors.

Any in-house counsel from an NAM member company is eligible to join, including multiple counsel from the same company.

If you are interested in serving on this group, please contact Pam Roper from the MCLA team by emailing her at PRoper@NAM.org. We look forward to working with you!

MCLA in the Courts

Class Actions

Court rejects appeal of dubious class-action certification: The Supreme Court declined to hear a National Association of Manufacturers (NAM)-supported appeal of a class action case. A lower court departed from precedent when it approved a presumption of class-wide antitrust impact based on allegations of a coordinated cardboard packaging industry price increase. Many industries use price indexes that help set standard prices, and this case raises concerns that manufacturers will be exposed to expansive class-action antitrust liability.

High court to decide whether a class action can be certified if there is no reliable way to identify class members: The NAM filed a brief with the Supreme Court supporting ConAgra in a case involving whether a class action can be certified if there is no reliable way to find class members, short of a series of mini-trials. If this uncertainty prevails, plaintiffs’ lawyers will inevitably seek friendly forums.

Unanimous Supreme Court victory in Goodyear case: The Supreme Court ruled unanimously in favor of Goodyear, invalidating a $2.7 million award of legal fees arising from alleged discovery violations. The Manufacturers Center for Legal Action (MCLA) argued that a lower court had erred in calculating the award by failing to require a direct causal link between the conduct and the fee awarded. The court agreed that sanctions requiring a litigant to pay the other side’s legal fees must be limited to the fees incurred solely because of the misconduct. The case now returns to the lower courts for determination of the appropriate award.

Manufacturers intervene in Colorado oil and gas permitting case: The NAM asked the Colorado Supreme Court to review a lower court decision that severely restricted energy production; this decision essentially amounts to a de facto ban on oil and gas production in Colorado and is in direct conflict with the Colorado Oil and Gas Conservation Act. The National Federation of Independent Business, the Colorado Association of Commerce and Industry and the Independent Petroleum Association of America joined our brief.

NAM appeals California ruling on cap-and-trade tax: A California appeals court ruled that a greenhouse gas cap-and-trade auction system that is raising billions of dollars is not a tax. The NAM recently filed an appeal in the California Supreme Court since the lower court ruling effectively gives the state a blank check to raise unlimited revenue without any meaningful restraint—in violation of California law.

Business allies file statement with WTO supporting Philip Morris: The NAM led a group of associations in filing a joint World Trade Organization (WTO) statement. Thailand has failed to abide by its WTO commitments on customs valuation. The dispute raises important issues for the international business community, and our statement emphasizes the importance of the WTO’s customs valuation rules to international trade.

NAM files brief supporting Shell in discovery case: The NAM filed a brief with other associations supporting Shell in a case concerning a district court’s authority to order the law firm representing Shell to turn over documents produced under a confidentiality order in prior litigation. Our brief draws the court’s attention to the serious consequences such discovery could have for attorney-client communications and to litigants’ confidence in confidentiality stipulations.

NAM pushes back against expansive view of California employment law: The NAM, along with other associations, filed a brief concerning the California WARN Act, which requires employers to provide 60 days’ notice before any “mass layoff, relocation, or termination.” Our brief argued that the court erred in this case by interpreting “layoff” to include a furlough during which about 90 employees (less than 3 percent of NASSCO’s workforce) did not earn wages but nevertheless remained NASSCO employees.

Manufacturers seek clarification of Dodd-Frank whistleblower provision: The NAM filed a brief supporting a district court’s conclusion that the statutory definition of “whistleblower” in Dodd-Frank must be applied across all provisions of the law, including anti-retaliation provisions.

NAM files main brief in “waters of the United States” case: The Supreme Court is moving ahead in the NAM’s case seeking to determine which court is the proper forum for challenges to the “waters of the United States” rule. Our recently filed main brief argues that the Clean Water Act requires appeals courts to hear challenges to regulations in limited circumstances, and our challenge to this rule is not one of them.

Supreme Court declines to hear GM bankruptcy appeal: The Supreme Court declined to hear General Motors’ appeal of a lower court ruling that makes the company liable for liabilities that it did not agree to take on after bankruptcy. The lower court upset fundamental expectations by holding an innocent purchaser liable for product liability claims arising from a product made by a previous entity. The NAM argued that this ruling will make it harder for companies to get value for assets in bankruptcy, will harm creditors, and unfairly puts the liability on innocent parties.

Court suspends ruling on Clean Power Plan challenge: The Environmental Protection Agency (EPA) requested, our coalition supported and a federal appeals court agreed to hold the legal challenge to the Obama administration's Clean Power Plan in abeyance. The Trump administration is currently reconsidering the rule.

Manufacturers step in to limit harmful lawsuits: The MCLA filed a brief arguing that the Natural Resources Defense Council (NRDC) does not have standing to sue the Consumer Product Safety Commission (CPSC) to force a deadline in the agency’s rulemaking on use of phthalates in certain consumer products.

More Information: NRDC v. CPSC (U.S. District Court for Southern District of New York)

OSHA

Manufacturers seek to reopen beryllium rule: The NAM and allied associations filed a petition to stay and reopen the beryllium rule with the Occupational Safety and Health and Administration (OSHA). The NAM sought review of the new rule and requested that the effective date of the standards be delayed for six months so the agency could re-open the rulemaking to allow comment on the substantial changes made between the issuance of the proposed and final rules.

More Information: Airborne v. OSHA (U.S. Court of Appeals for the Eighth Circuit)